The Canadian multinational e-commerce company, Shopify, announced its performance results for the fourth quarter on Wednesday. Beating analysts estimates for earnings and revenue and giving upbeat guidance for fiscal 2020, the stock was seen trading 7.8% higher later in the day. Hitting $593.89 per share, Shopify marked a new high (52-week) on Wednesday.
According to Refinitiv, analysts were expecting the e-commerce giant to note $482.1 million in revenue in the fourth quarter. On the earnings front, they had anticipated the company to make 24 cents of earnings per share. In its quarterly results on Wednesday, the company recorded a significantly higher $505.2 million in revenue while the EPS was posted sharply better than expected at 43 cents per share in the recent quarter. The company also highlighted a 47% growth in its quarterly revenue on YoY (year over year) basis.
Shopify’s Guidance For Fiscal 2020
In its guidance for fiscal 2020, Shopify said that it now expects to generate $2.13 to $2.16 billion in revenue. Experts forecast a lower $2.11 billion for the e-commerce company this year. In the fourth quarter, Shopify cited holiday sales to have contributed the most to its upbeat performance. Global sales were registered at more than $2.9 billion during the period that marked a massive 61% increase in worldwide sales as compared to the same quarter last year.
CEO Tobi Lutke commented on the earnings report and highlighted that the platform now has over 1 million merchants. With $1 billion investment sidelined to establish fulfillment centers across the United States, the company is committed to bringing more merchants to its e-commerce platform and pose a greater challenge to the staunch rivals like eBay and Amazon. With fulfillment centers in the U.S, experts forecast the company to rise as a major threat to Amazon’s domestic business as Shopify will be able to deliver packages within two days or maybe even less.
Mark Mahaney Brands Shopify As The Second Largest E-commerce Retailer In The U.S
Following the earnings report, Mark Mahaney of RBC Capital Markets retained his bull signal on Shopify’s stock. With an upgraded target of $650 for the price from $400, Mahaney is now the largest surveyed (by FactSet) bull of Shopify’s stock. Mahaney also commented that the recent performance results make Shopify the second largest e-commerce retailer (in aggregate) in the United States after Amazon.